Domestic Synthetic Materials Market May Be Shaken by Japan Earthquake   

Since a massive earthquake hit Japan, followed by a tsunami, both basic organic chemical materials and synthetic materials markets across the globe have witnessed rapid changes as a response to this disaster. According to market sources, the catastrophe has resulted in a 20% reduction in refining capacity in Japan which makes up 3.5% of Asia's and 1% of the global refining capacity as well as that numerous polyethylene plants and facilities in Japan were either shut or running at low rates following the deadly earthquake and devastating tsunami.
   The earthquake in Japan will indeed affect China's petrochemicals import because Japan is the third largest import source for China and China imports a mass of synthetic materials and monomers from Japan every year. In the short term, the shortfall in electricity supply and power outages may lead to a sharp reduction of Japan's basic petrochemicals production, which directly affects related products outlet for the Chinese market, and low operating rates of synthetic material plants in Japan will indirectly reduce the supply of synthetic material to the Chinese market.
   In addition, the startup schedule of new-built & expansion plants including basic petrochemical materials and synthetic materials in Japan have been delayed due to the earthquake. And power shortage might be a factor that brings a long term impact to the supply of China's organic chemical material.


A big impact to basic organic chemical materials and synthetic materials markets

China spent US$7.083 billion for purchasing Japan's basic organic chemical materials in 2010, accounting for 18.23% of China's total chemicals import value, which was the first big variety of imports. The synthetic materials came after by US$ 6.247 billion in 2010, accounting for 16.08% of totals.

Table 1 Key basic organic chemicals sourced from Japan in 2010 (US$ million, kt, %)
Product    Import Value from Japan    Import Volume from Japan
    Total Import Value   Total Import Volume    Japan's Proportion in Total Import
    Japan's Proportion in Total Import
Vinyl Chloride    584    722.6
    873    1079.4    66.87    66.94
Pure MDI    139    69.2
    270    133    51.65    52.01
Methacrylate    93    39.6
    218    98.3    42.56    40.22
Crude xylene    206    234.8
    608    698.7    33.79    33.6
Methionine    139    35.6
    437    107.4    31.92    33.18
Paraxylene    1055    1002.7
    3661    3527.2    28.81    28.43
Ethylene    253    217.8
    944    815.4    26.86    26.72
Propylene    422    348.3
    1845    1524.2    22.85    22.85
Styrene    894    743.1
    4410    3687.1    20.26    20.15
Octanol isomers    143    91
    765    464.6    18.7    19.59
Phenol    163    121
    920    624    17.76    19.4
Acrylonitrile    148    74.3
    905    445.8    16.34    16.66
Methylbenzene    115    132.9
    702    829.3    16.36    16.03
6-caprolactam    238    95
    1560    631.4    15.28    15.04
Other terephthalic acid    149    161.5
    1128    1239.2    13.19    13.03
BPA(bisphenol A)    96    54.4
    817    439.2    11.75    12.38
PTA    173    182.6
    5116    5402.4    3.38    3.38
Other Aromatics mixture    59    70.7
    1922    2451.6    3.07    2.88
Ethylene Glycol    71    77.3
    5770    6644.1    1.23    1.16
Subtotal    5139    4474.3
    32869    30842.4
Others    1944    
    17270    14784.2
Total    7083    
    50139    45626.6
Source: CCR

Table 2 Key synthetic materials sourced from Japan in 2010    (US$ million, kt, %)
Product    Import Value from Japan    Import Volume from Japan
    Total Import Value   Total Import Volume    Japan's Proportion in Total Import
    Japan's Proportion in Total Import
Poly-MDI    246    139.5
    595    325.8    41.34    42.82
Other polyesters    191    22.5
    554    123.6    34.48    18.2
PVC    494    472.8    1626
    1511.2    30.38    31.29
Acrylic polymers    291    77.1
    975    325.6    29.85    23.68
PMMA    183    62.9
    639    237.4    28.64    26.5
Polysiloxane    236    38
    860    196.1    27.44    19.38
PBT    88    21.9    460